1-6
7-12
13-18
19-24
25-30
31-36
37-42
43-48
49-54
55-60
61-66
67-72
73-78
79-84
85-90
91-96
97-102
103-108
109-114
115-120
121-126
127-132
133-138
139
1-6
7-12
13-18
19-24
25-30
31-36
37-42
43-48
49-54
55-60
61-66
67-72
73-78
79-84
85-90
91-96
97-102
103-108
109-114
115-120
121-126
127-132
133-138
139
business is involved. In addition, duties of lawyers employed by the government or lawyers in
military service may be defined by statutes and regulations. Therefore, defining precisely the
identity of the client and prescribing the resulting obligations of such lawyers may be more difficult
in the government context. Although in some circumstances the client may be a specific agency, it is
generally the government as a whole. For example, if the action or failure to act involves the head of
a bureau, either the department of which the bureau is a part or the government as a whole may be
the client for purposes of this Rule. Moreover, in a matter involving the conduct of government
officials, a government lawyer may have authority to question such conduct more extensively than
that of a lawyer for a private organization in similar circumstances. This Rule does not limit that
authority. See note on Scope.
[7] There are times when the organization's interest may be or become adverse to those of
one or more of its constituents. In such circumstances the lawyer should advise any constituent,
whose interest the lawyer finds adverse to that of the organization of the conflict or potential conflict
of interest, that the lawyer cannot represent such constituent, and that such person may wish to
obtain independent representation. Care must be taken to assure that the individual understands that,
when there is such adversity of interest, the lawyer for the organization cannot provide legal
representation for that constituent individual, and that discussions between the lawyer for the
organization and the individual may not be privileged.
[8] Whether such a warning should be given by the lawyer for the organization to any
constituent individual may turn on the facts of each case.
[9] Paragraph (e) recognizes that a lawyer for an organization may also represent a principal
officer or major shareholder.
[10] Under generally prevailing law, the shareholders or members of a corporation may
bring suit to compel the directors to perform their legal obligations in the supervision of the
organization. Members of unincorporated associations have essentially the same right. Such an
action may be brought nominally by the organization, but usually is, in fact, a legal controversy over
management of the organization.
[11] The question can arise whether counsel for the organization may defend such an
action. The proposition that the organization is the lawyer's client does not alone resolve the issue.
Most derivative actions are a normal incident of an organization's affairs, to be defended by the
organization's lawyer like any other suit. However, if the claim involves serious charges of
wrongdoing by those in control of the organization, a conflict may arise between the lawyer's duty
to the organization and the lawyer's relationship with the board. In those circumstances, Rule 1.7
governs who should represent the directors and the organization.
See Rule 1.0(f)
“Reasonably”See Rule 1.0(k)
See Rule 1.0(l)
PROPOSED RULE 1.14
CLIENT UNDER A DISABILITY
representation is impaired, whether because of minority, mental disability or for some other reason,
the lawyer shall, as far as reasonably possible, maintain a normal client-lawyer relationship with the
client.
a client, only when the lawyer reasonably believes that the client cannot adequately act in the client's
own interest.
[1] The normal client-lawyer relationship is based on the assumption that the client, when
properly advised and assisted, is capable of making decisions about important matters. When the
client is a minor or suffers from a mental disorder or disability, however, maintaining the ordinary
client-lawyer relationship may not be possible in all respects. In particular, an incapacitated person
may have no power to make legally binding decisions. Nevertheless, a client lacking legal
competence often has the ability to understand, deliberate upon, and reach conclusions about
matters affecting the client's own well-being. Furthermore, to an increasing extent the law
recognizes intermediate degrees of competence. For example, children as young as five or six years
of age, and certainly those of ten or twelve, are regarded as having opinions that are entitled to
weight in legal proceedings concerning their custody. So also, it is recognized that some persons of
advanced age can be quite capable of handling routine financial matters while needing special legal
protection concerning major transactions.
[2] The fact that a client suffers a disability does not diminish the lawyer's obligation to treat
the client with attention and respect. If the person has no guardian or legal representative, the lawyer
often must act as de facto guardian. Even if the person does have a legal representative, the lawyer
should as far as possible accord the represented person the status of client, particularly in
maintaining communication.
[3] If a legal representative has already been appointed for the client, the lawyer should
ordinarily look to the representative for decisions on behalf of the client. If a legal representative has
not been appointed, the lawyer should see to such an appointment where it would serve the client's
best interests. Thus, if a disabled client has substantial property that should be sold for the client's
benefit, effective completion of the transaction ordinarily requires appointment of a legal
representative. In many circumstances, however, appointment of a legal representative may be
expensive or traumatic for the client. Evaluation of these considerations is a matter of professional
judgment on the lawyer's part.
[4] If the lawyer represents the guardian as distinct from the ward, and is aware that the
guardian is acting adversely to the ward's interest, the lawyer may have an obligation to prevent or
rectify the guardian's misconduct. See Rule 1.2(d).
[5] Rules of procedure in litigation generally provide that minors or persons suffering
mental disability shall be represented by a guardian or next friend if they do not have a general
guardian. However, disclosure of the client's disability can adversely affect the client's interests. For
involuntary commitment. The lawyer's position in such cases is an unavoidably difficult one. The
lawyer may seek guidance from an appropriate diagnostician.
[6] If the health, safety or financial interest of a person under a disability is threatened with
imminent and irreparable harm, a lawyer may take legal action on behalf of such a person even
though the person is unable to establish a client-lawyer relationship or to make or express
considered judgments about the matter, when the disabled person or another acting in good faith on
the person’s behalf has consulted the lawyer. Even in such a situation, however, the lawyer should
not act unless the lawyer reasonably believes that the person has no other lawyer, agent or other
representative available. The lawyer should take legal action on behalf of the disabled person only
to the extent reasonably necessary to maintain the status quo or otherwise avoid imminent and
irreparable harm. A lawyer who undertakes to represent a person in such an exigent situation has
the same duties under these Rules as the lawyer would with respect to a client.
[7] A lawyer who acts on behalf of a disabled person threatened with imminent and
irreparable harm should keep the confidences of the disabled person as if dealing with a client,
disclosing them only to the extent necessary to accomplish the intended protective action. The
lawyer should disclose to any tribunal involved and to any other counsel involved the nature of his
or her relationship with the disabled person. The lawyer should take steps to regularize the
relationship or implement other protective solutions as soon as possible. Normally, a lawyer would
not seek compensation for such actions taken on behalf of a disabled person.
See Rule 1.0(i)
“Reasonably Believes”See Rule 1.0(j)
PROPOSED RULE 1.15
SAFEKEEPING PROPERTY
possession in connection with a representation separate from the lawyer's own property and funds.
maintained in an insured depository institution which is located in the state where the
lawyer’s office is situated (or elsewhere with the consent of the client or third person) and
which participates in the overdraft notification program as required by Supreme Court Rule
9. A lawyer may deposit the lawyer’s own funds in such an account for the sole purpose of
paying bank service charges on that account, but only in an amount necessary for that
purpose.
Except as provided by subparagraph (a)(1)(ii), interest earned on accounts in
which the funds of clients are deposited less any deduction for service charges, fees
of the depository institution, and intangible taxes collected with respect to the
deposited funds shall belong to the clients whose funds are deposited and the lawyer
shall have no right or claim to such interest.
A lawyer shall deposit funds of clients and third persons that are nominal in
amount or expected to be held for a short period of time in a pooled account
that participates in the Interest On Lawyers’ Trust Accounts
("IOLTA") program, which provides that all interest earned be paid to the Tennessee
Bar Foundation in accordance with the requirements of Supreme Court Rule. The
determination of whether funds are nominal in amount or are to be held for a short
period of time rests in the sound discretion of the lawyer and no charge of ethical
impropriety or other breach of professional conduct shall attend an attorney’s
exercise of good faith judgment in that regard.
(iii)A lawyer may decline to participate in the IOLTA program by notifying
Chief Justice of the Supreme Court and the Board of Professional Responsibility as
permitted by Supreme Court Rule _____.
shall promptly notify the client or third person. Except as stated in this rule or otherwise permitted
by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person
any funds or other property that the client or third person is entitled to receive and, upon request by
the client or third person, shall promptly render a full accounting regarding such property. If a
dispute arises between the client and a third person with respect to their respective interests in the
funds or property held by the lawyer, the portion in dispute shall be kept separate and safeguarded
by the lawyer until the dispute is resolved.
When in the course of representation a lawyer is in possession of property in which both the
lawyer and another person claim interests, the property shall be kept separate by the lawyer until
there is an accounting and severance of their interest.
[1] A lawyer should hold property of others with the care required of a professional
fiduciary. Securities should be kept in a safe deposit box, except when some other form of
be kept separate from the lawyer's business and personal property and, if monies, in one or more
trust accounts. Separate trust accounts may be warranted when administering estate monies or
acting in similar fiduciary capacities.
[2] Lawyers often receive funds from third parties from which the lawyer's fee will be paid.
If there is risk that the client may divert the funds without paying the fee, the lawyer is not required
to remit the portion from which the fee is to be paid. However, a lawyer may not hold funds to
coerce a client into accepting the lawyer's contention in a dispute with the client. The disputed
portion of the funds should be kept in trust and the lawyer should suggest means for prompt
resolution of the dispute, such as arbitration. The undisputed portion of the funds shall be promptly
distributed.
[3] Third parties, such as a client's creditors, may have just claims against funds or other
property in a lawyer's custody. A lawyer may have a duty under applicable law to protect such
third-party claims against wrongful interference by the client, and accordingly may refuse to
surrender the property to the client. However, a lawyer should not unilaterally assume to arbitrate a
dispute between the client and the third party. If not inconsistent with the interests of the client, the
lawyer may file an interpleader action concerning funds in dispute between the client and a third
party.
[4] The obligations of a lawyer under this Rule are independent of those arising from
activity other than rendering legal services. For example, a lawyer who serves as an escrow agent is
governed by the applicable law relating to fiduciaries even though the lawyer does not render legal
services in the transaction.
[5] In certain circumstances, Tennessee law governing abandoned property may apply to
monies in lawyer trust accounts or other property left in the hands of lawyers and may govern its
disposition. See Tenn. Code Ann. §§ 66-29-101 through 204 (1993 and Supp. 1999) (Uniform
Disposition of Unclaimed Property Act).